Paul L. Caron
Dean


Friday, September 6, 2019

Weekly SSRN Tax Article Review And Roundup: Holderness Reviews Drumbl's Tax Attorneys As Defenders Of Taxpayer Rights

This week, Hayes Holderness (Richmond) reviews Michelle Lyon Drumbl (Washington & Lee), Tax Attorneys as Defenders of Taxpayer Rights, 91 Temple L. Rev. ___ (2019):

Holderness (2017)Tax attorneys serve many purposes. Two examples have been recently explored in this review series: tax attorneys may provide de facto insurance to their clients or may serve as agents of social justice. To these examples, Michelle Drumbl’s forthcoming essay adds another: tax attorneys defend taxpayer rights. One might be tempted to respond, “Well, of course they do; each tax attorney’s job is to make sure her clients only pay the tax they owe.” The strength of Drumbl’s essay is not to contradict this observation or to dwell on it, but to expose it as too narrow a view of the tax attorney’s function.

Drumbl begins this project by exploring the development of the Taxpayer Bill of Rights (TBOR), which was finally codified in a single list only in 2015 (though, as the essay observes, many of the rights did predate the current listing in IRC § 7803(a)(3)). These rights include “the right to be informed,” “the right to quality service,” “the right to pay no more than the correct amount of tax,” “the right to challenge the position of the Internal Revenue Service and be heard,” “the right to appeal a decision of the Internal Revenue Service in an independent forum,” “the right to finality,” “the right to privacy,” “the right to confidentiality,” “the right to retain representation,” and “the right to a fair and just tax system.” Astute readers will notice that only one of these codified rights is the right to pay no more than the tax one owes.

Heartbreaking administrative abuses and oversights formed the impetus for codifying the TBOR, with the hope that the legislation would lead to reforms within the IRS. Certainly, the IRS has changed for the better since the first TBOR legislation, but Drumbl makes a compelling case for concern that tax administration is backsliding. Understaffed and underfunded (exacerbated by the significant changes to the federal income tax law in 2017), the IRS has been forced into cutting taxpayer services and into adopting increasingly automated procedures and processes. Here, it is important to understand the wide-ranging impact of the IRS’ administrative responsibilities: the process of tax collection can be deeply intrusive into taxpayers’ lives and may come with serious collateral consequences, and the process of administering social benefit programs such as the EITC can also be deeply impactful in participants’ lives. Less attention from the IRS on individuals’ cases and issues threatens abuses of taxpayer rights such as those of information, quality service, and a fair and just tax system.

One solution to this potential problem is to increase IRS resources, but Drumbl—understandably—does not spend her time advocating for that solution. Instead, she turns to another guardrail. 1998’s TBOR legislation established the low-income taxpayer clinic grant program, which has greatly expanded access to tax representation for vulnerable populations. Drumbl picks up on this development as crucial to the thesis of her essay, which is that tax attorneys are a critical line of protection for taxpayer rights. As sophisticated repeat players, tax attorneys, particularly those working with or in low-income taxpayer clinics, can ensure that taxpayers receive the information, service, and process they are due, while also protecting taxpayers from the collateral consequences of ineffective tax administration.

Drumbl argues that this role for tax attorneys is especially important in the case of vulnerable populations who may be contesting relatively small amounts of tax, and who, without representation, might choose to suffer through abuses of their rights. Such choices, in turn, would whittle away at government accountability, which would be harmful to the overall state of the tax system. Her arguments are sound and sensible, and could be expanded even further. It would be helpful to continue to develop how tax attorneys (in concert with other tax professionals) can help reform the law to ease the burden placed on vulnerable populations, not only from the perspective of the substantive direct impact on those populations but also from the IRS’ perspective of administering the laws. To be fair, the essay touches briefly on such concerns, which are in line with the thrust of the argument, but, my appetite whetted, I could not help but hunger for more. It would also be interesting to more deeply explore the scope of the taxpayer right to representation and what obligations that right places on tax attorneys.

Stepping back, Drumbl’s essay essentially boils down to a call to service for tax attorneys in this particular era of tax administration: they must protect the taxpayers that they serve. To be clear, Drumbl does not place blame or ill-will at the feet of the IRS, which is full of dedicated public servants deserving appreciation and praise. Rather, the problem Drumbl highlights—the backsliding of protections for taxpayers against administrative failings—results from an agency stretched too thin. Her position is that tax attorneys must fill that void and prop up taxpayer rights against the backslide. Those tax attorneys among us should heed her call.

Here’s the rest of this week's SSRN Tax Roundup:

https://taxprof.typepad.com/taxprof_blog/2019/09/weekly-ssrn-tax-article-review-and-roundup-holderness-reviews-drumbls-tax-attorneys-as-defenders-of-.html

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